In a typical energy distribution system, a power plant produces energy with a power generator, such as a coal or gas fired generator, a hydro-powered generator, or a nuclear-powered generator. Power is then transmitted to an end user over a transmission grid. The transmission grid, in turn, supplies this power to a local distribution grid which supplies the power to end users via low-voltage transmission lines, substations, distribution circuits, etc. A utility company can meter the power at the end-user's premises to determine how much power has been consumed.
One problem with traditional energy distributions is they employ antiquated transmission and distribution grids. This makes it difficult and cost prohibitive for utility companies to bring new and alternative power generators online, such as wind, solar, geothermal, etc. Another problem with these systems is that they centralize power distribution, which gives utility companies a market monopoly. Thus, many utility companies are reluctant to improve their power distribution infrastructure.